From left: Angus Benbow, Simon Hoyle and Tom Reddacliff

A confluence of factors including declining adviser numbers, increased competition and the evolution of licensee models is giving advisers increased leverage over licensees, with advisers on the move getting more judicious about their dealer group selection.

That was the view of a panel at the Professional Planner Best Practice Forum Digital webinar this week, where participants discussed the forces shaping the licensee landscape and what advisers are looking for in their AFSL provider today.

According to CoreData head of market insights Simon Hoyle, advisers are becoming “increasingly critical” of the service they’re receiving from licensees and the price that they’re paying.

“Advisers are in the driver’s seat in terms of choosing a licensee or being able to drive competition between licensees to get the advisers and the advice practices on board,” Hoyle said.

Competition is key part of the changing dynamic, Hoyle explains, as declining adviser numbers continue to reduce the pool of clients that licensees can attract.

“Depending on what numbers you use there are about 6500 adviser that have left the industry since the start of 2019,” he said. “Competition is becoming more intense.”

Angus Benbow, the chief executive of mid-sized licensee Centrepoint Alliance, said advisers are also becoming more demanding of quality services to help them navigate a changing and challenging advice landscape, which is putting pressure on dealer groups to up their game.

“Now the eyes are firmly on the licensee,” Benbow revealed, adding that advisers are increasingly saying: “I’m paying these fees, I’m sitting on your license, so what am I getting for that and are you able to support me in my business?”

Benbow made the observation that as licensees continue to eliminate conflicted product subsidies from their balance sheet, not only do they need to charge advisers more, but the onus is on them to make sure the advisers aren’t missing out on any services they are used to receiving.

“Advisers are needing technology support, regulatory support, training and education, and they’re looking for the license to provide that, whereas in the past they potentially were able to get that from different product providers,” he explained.


Encore Advisory managing director Tom Reddacliff made the point that the gradual elimination of product subsidies at the dealer group level is moving the AFSL system towards what he calls “true economics”.

“If you look at the economics of the past, typically you would receive about $20K per adviser but it would cost you about $35K to $40K to provide the service,” he said, adding that the delta was covered by product provider subsidies and volume bonuses from investment platforms.

Now, he explained, he gets “concerned” if an authorised licensee is charging $20,000, because the price is an indication that the licensee is harbouring conflicted revenue in favour of revealing the “true cost”.